If you are finding it difficult to get approved for an auto loan or credit card, you may be struggling with a unhealthy credit score. Repairing your credit may not always be a quick and easy process, but there are many ways you can improve your score and help yourself get qualified for the funds you need.
Here we look at some tips you can try to improve your credit score.
Check your credit report for any errors.
The first step to improving your credit score is checking your credit report to ensure everything is up-to-date and accurate. Nearly 1 in 5 credit reports can have errors that could be damaging your credit score substantially. You can get a free copy of your credit report from AnnualCreditReport, the official government credit report site. This site is free for use, up to three times per year.
Pay off any debts
Any large outstanding balances can be damaging your score, and the sooner you pay these off the better your score will be. Credit utilization makes up 30% of your FICO credit score.
Paying off your high-balance credit cards with over 30% utilization and eliminating any debt(s) you have is a great place to start for improving your score.
Set payment reminders to avoid late payments
Late payments can damage your score and make you appear as a higher-risk borrower to lenders. Take the time to set payment reminders on your phone or calendar to remind yourself to make these payments on time.
It is always a good idea to set these a few days early to give yourself time and to ensure you won’t forget any bills or have the payment bounced. Many billing sites also offer automatic payments, which can take the worry of missing a payment out completely.
Add a line of credit
Your credit mix can have a moderate impact on your credit score. If you find yourself with few lines of credit, consider adding a new one. Lenders want to see that you can manage different types and multiple lines of credit.
If the only form of credit you have is a credit card, this may be negatively impacting your score. Creditors and lenders want to be certain that you are able to handle diverse types of credit, ranging from auto loans to credit cards. However, note that applying for a line of credit will initially lower a consumers credit score.
Open a secured credit card
If you are having trouble being approved for a credit card because of bad credit, consider applying for a secured credit card. A secured credit card will require you to pay a cash deposit upfront.
This deposit will likely match the amount of your credit limit for this card. Each time you make a complete and full payment, your credit limit resets to the deposit amount. Secured credit cards are a great way for those with bad credit to start repairing their score.
If you have less than perfect credit and don’t know where to go, CrediReady can help. Our trusted network of credit repair experts can boost your score and help you qualify for the credit you need. Take a moment to fill out our free no-obligation credit repair inquiry form and start fixing your credit today!